Rising flood risks to bring increased duty on commercial property landowners

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Floods are usually triggered by natural events – like storm Dennis which, although personified by its name, does not constitute a legal person and cannot be held accountable for the damages it caused. But historically, the court has proved willing to find that the neighbouring land use, rather than nature, had caused or worsened flooding.

The last few decades have indeed seen the development of a considerable body of case law in relation to flooding. In 1980 Leakey v The National Trust indicated a fundamental shift, placing an increased duty on landowners to take active steps to prevent damage to their neighbours. Now, as climate change brings wetter, stronger weather, and the risk of flooding increases, the scope of the duty on every landowner is likely to be extended further in the years to come.

Landowners should consider the extent of the risk, the foreseeable extent of any damage, whether it is practicable to prevent or minimise any damage, and the financial resources of the parties. If there is a reasonably foreseeable risk that damage by flooding may arise to neighbouring land due to a defect on your land, and if you can take reasonable steps to prevent damage, then you should.

These duties apply to all landowners – public or private – but the rise of flood risk is particularly concerning for commercial property landowners. It can not only reduce the value of their property, but also lead to commercial property lease disputes and to a loss of income, if rent payments may be delayed or even cease for several months.

To mitigate business exposure, landowners should undertake robust due diligence from the outset. They should prepare a flood plan in conjunction with the tenant, and ensure they have the necessary commercial lease arrangement, loss of rent cover and insurance policy.

In this context, it’s not surprising that recent years have seen the development of specialised schemes like Flood Re – a joint initiative between the Government and insurers which aims to make the flood cover part of household insurance policies more affordable – or the British Insurance Brokers’ Association’s new commercial insurance scheme for businesses, that includes flood cover for many commercial premises and let properties located in areas at risk from flooding.